Well folks, we have had our next lotto drawing in the War on Terror, and it appears that we have a winner. Saudi Arabia? Pakistan? No, the next lucky target appears to be Iran. That's right. Given Mr. Bush's increasingly bellicose remarks about Iran, US embarrassment to find out that their first choice to head a new democratic Iraq, Ahmed Chalabi, was an Iranian spy, and Iran's announcement (however much truth there is behind it) that they are now members of the nuclear club, it would appear that our current administration has picked a new target in their ongoing War against Terror. Already the propaganda machine-excuse me-the media is hyping up reports stating the Iran had more to do with 9/11 than did Iraq. So it would probably behoove us, in our attempt to understand what this is really about, to look at Iran's oil resources and its strategic position with regard to the oil resources of neighboring territories. But first, I think we need to criticize the fundamental strategy of Georgy's War on Terror.

Never mind that we are already stretched so thin that we do not have the troops necessary to stage another invasion. King George (or King Kerry, should the anointment go that way) stands ready to build vast armies utilizing the new draft act poised to sail through Congress just as soon as this inconvenient election is out of the way. Of course, these vast armies will be filled with the worst sort of soldiers: raw draftees with no desire to go to war. They will be at the helm of the most sophisticated war machinery ever designed, pumped full of experimental drugs and amphetamines, and plugged in to driving, angry heavy metal hip hop. They'll be halfway across the country before many of them even begin to see what a mess they're in. Hey, don't you know that Dubya's strong opposition to abortion is all because he knows that twenty years from now we will need more human fodder to replace the soldiers mangled in his continuous War on Terror? Never mind that we will become bogged down in every country we enter, Dubya's desired abortion ban will provide us with many more troops.

Seriously, what bothers me is that Bush's critics do not fault the premise of war altogether. Even Kerry continues to back the invasion of Iraq, though he says we went in for the wrong reason. It seems that nobody is questioning the need for a war on terror anymore; they are just questioning our choice of targets. What ever happened to the basic argument that you do not solve the problem of terrorism with war?

War is an imperialistic pursuit, end of story. There has never been a military invasion for any other purpose in the history of humankind. Countries are invaded to subjugate the population and seize the resources. Period. Defense is another matter. Defense is what a nation does when it has been invaded. Building up a strong and visible defense can arguably help to discourage potential invaders, but the moment that defensive force crosses an international border it has become an army of aggression, unless called to the aid of another.
For over sixty years, the power structure in the US has worked on blurring this distinction. A century ago, the American public was extremely resistant to becoming involved in foreign wars. The resistance to entering World War One was very strong. Hundreds of thousands of men had to be tried and sentenced for resisting the war and for speaking out against the war before the public was cowed into going along with the effort. In order to gain public support for World War Two, Roosevelt had to egg the Japanese into attacking Pearl Harbor. But from that point on, we learned the lessons taught by the Nazi propaganda machine.

One purpose of the Cold War was to get the American public used to the idea of invasive imperialistic wars under the guise of fighting against communism. Even Korea and Vietnam were spun this way, though the first was a draw and the second was a widely unpopular failure. All of the wars and interventions of the later Twentieth century were ostensibly fought to prevent communism from spreading through the globe. The American people have come to accept the premise of preventive intervention, even though most of these actions achieved mixed results at best.

Bush has taken the next step in this progression, drawing up a policy of preemptive strikes against any country we suspect might intend to do us harm. It seems that Georgy has learned well from his grandfather's connection to the Nazi war machine. He is the ultimate successor to Hitler in the quest for global domination, and domestic subjugation.

Is the world any safer as a result of this War on Terror? No; according to reports by the CIA and other intelligence agencies, terrorist recruitment has increased since the War on Terror began. Every new war campaign is in reality a recruitment drive for terrorists. Wait a minute, argues the Rumsfeldian chickenhawks, we are drawing our assessment far too soon. The War on Terror has just begun. Certainly the terrorists are rallying their troops in response. Just wait until we have moved against all of them, then we will stomp this fire out. Yes, but by then, the entire world will have gone up in the conflagration. They cannot see that you do not fight fire by throwing gasoline on it (or Napalm, as the case may be).

Our own personal experience tells us that martial action does not solve social problems. Do any of us feel safer after twenty years of war on drugs? No, but hey, we have the best armed police force in the world, and the largest prison population of any country per capita.

The terrorism we faced on 9/11, and in the terrorist attacks leading up to that event, was bred from the victims of the Cold War. Terrorists are bred from war and interventions. When we invaded countries or staged interventions to prevent a popular uprising, we may have succeeded in quelling the uprising. But by beating down the popular support for the uprising, we created one hundred enemies for every one that we killed or tortured. And while these beaten masses may remain far too oppressed to rise up in the same manner, their desperation ultimately finds expression in acts of terrorism.

No, war is not the solution to terrorism. We should never have allowed the debate to center upon which country we should invade, nor whether or not we are invading for the right reasons. Don't let them fool you; there are no right reasons to invade another country. A military response is a boon for terrorists, not a bane. It is what they want.

The solution to terrorism is social programs. Instead of spending billions of dollars to destroy these countries and murder people, we would have met with much more success by spending just a fraction of that amount to help build up these countries, providing their people with a positive future. This is how you fight the despair which results in terrorism, not with guns and bombs, but through education and investments in social infrastructure.

And what about here at home? How best can we benefit our youth and build a positive, safe atmosphere for our families at home? What if we offered all US citizens a free college education? We have the money to do so, but now extort that money from our tax payers in order to feed a bloated military and domestic prison system. Then we tell our kids that if they serve in the military, their college education will be paid for. Why not pay for it directly and put our military on a strict diet? Why not build schools instead of prisons? Social structure and education is how we make this world a better and safer place, not military spending and warfare.

But I am afraid it is far too late for this option. There are too many piggies at the trough of military spending, and those piggies in turn pay off our politicians. Before we could ever stop this insane war machine, we would have to wean those piggies. And we would have to admit that a war response to terrorism is wrong. To make such an admission would be to confess that our country is guilty of war crimes. Those who would have to make such an admission would also have to stand up and accept the punishment for their crimes. And they are not about to do that.

So it's bombs away. Next stop Iran. Look for the War on Terror coming soon to a town near you.

Iran has been making bold claims about its oil reserves and future production. They have recently boosted their stated recoverable reserves to 132 billion barrels, second only to Saudi Arabia. And they are claiming that their output capacity will double by 2020. Iran expects to raise production from the current 4.2 million barrels per day (bpd) to 5 million bpd by 2010, and then to a prodigious 8 million bpd by 2020.1 However, analysts suspect that these claims are motivated by fears that Iraq will resume its former position in OPEC's allocation of quotas.

BP's yearly statistical review of world energy places Iranian reserves at 130.7 billion barrels, only slightly lower than the figure given by Iranian officials.2 This new reserve level was announced in 2003 by Iranian officials, and represents an unexplained hike of over 40 billion barrels from the former stated reserves of 90 billion barrels. It is claimed that these additions result from recent exploration. Ali Bakhtiari, a Senior Expert attached to the Director's Office of the National Iranian Oil Company (NIOC), takes exception to these figures.

Dr. Bakhtiari, who has over 30 years of experience working for the NIOC, and who is considered to be one of the most knowledgeable sources concerning Iranian oil-if not Middle Eastern oil in general, has absolutely no faith in these inflated figures. In a communication with FTW Publisher/Editor Mike Ruppert, Dr. Bakhtiari observed…

As for Iran becoming No.2 in reserves, it is pure
propaganda based on wishful reserves. The proved
reserves leap from 90 bnb [billion barrels, editor] to
131 bnb announced in late 2003 by the Petroleum
Ministry of the Islamic Republic was lately (June 15)
accepted and publicized by BP in its June 2004 BP
Statistical and now the people ruling NIOC are
gloating over it.
Dr. Campbell's latest reserves estimate total Iran
reserves at around 60 bnb, and the greatest Iranian
expert on Iran reserves, Dr. Mohammad Ali Saidi (former
NIOC Director for Exploration and Production, with 40
years experience in the oil fields, now an international
consultant in Paris), believes they stand "around 40 bnb".3

I have to agree with Dr. Bakhtiari that the figures from Dr. Saidi and Dr. Campbell are more believable than those announced by the Petroleum Ministry. In the last few years, Iran has announced various new finds which they are using to boost their reserves and their future production targets. Azadegan, the largest recent find at a reputed 26 to 70 billion barrels (depending on who you talk to),4 is just a few miles east of the Iraqi border, in an area that was not readily accessible for exploration until the 1990s. Of the other recent discoveries, the most notable onshore discovery is Darkhovin, located near the Persian Gulf port city of Abadan, also near the Iraqi border. This oilfield is believed to hold 3-5 billion barrels.5 In 2001, the NIOC announced a major discovery offshore from Abadan, named Dasht-e Abadan. No data has been released, but officials claim that it rivals Azadegan in size.

Unfortunately, the size and quality of all of these discoveries is questionable. As mentioned, Iran has political and economic motives for inflating recent discoveries. And like other OPEC members, they have a record of padding reserve figures. Dr. Campbell has told me that Iran's most recent finds are of dubious validity. And the Azadegan discovery is actually two separate fields, one of which holds heavy oil.6 The recently announced discoveries are all highly suspicious.

Yet, even analysts who credit to the Iranians all of the reserves which they claim tend to be skeptical of their production forecasts. Sustainable production is currently estimated at 3.6 to 3.75 million bbl/d (barrels per day), and is expected to fall without investment in new fields.7 Many analysts suspect that production from existing wells has been damaged due to unsustainable practices and neglect-an effect of sanctions somewhat similar to the pre-invasion situation in Iraq. Depletion is running as high as 7%.8 Iran needs outside investment to refurbish existing infrastructure and to develop new fields.

Unfortunately, Iran has a "buy-back" system which deters foreign investment. These buy-back contracts are extremely complicated, and the negotiation of these contracts is often marked with last minute demands by the Iranians. Under this buy-back system, foreign investors are compensated by output for a short time before being legally required to sell back the field to NIOC.9 Investors feel that these contracts severely limit the profitability of buying into Iranian oil fields.

Between their questionable claims on reserves and discovery, and their disagreeable buy-back system, it is unlikely that Iran will meet any of their future production goals. From Colin Campbell's modeling and adjusted data, we find the following. Iran has already produced around 56 billion barrels (Gb), and has about 59.9 Gb of known reserves left for future production. Adding to that a generous 9.4 Gb for future discovery brings the figure for potential future production up to 69 Gb, and a grand total of 125 Gb. Allowing for new fields being brought online, Dr. Campbell gives Iran an overall 1.9% depletion rate. Due to vigorous pumping under the Shah, followed by his overthrow and the rise to power of the Ayatollah Khomeini, Iranian production actually peaked in 1971. Production has been rising toward a second peak since the 1980s. Dr. Campbell places the midpoint to depletion in the year 2007, and expects a secondary peak by 2010 at the very latest.11

Iran is also extremely well endowed with natural gas, holding a reported 812 Trillion cubic feet (Tcf) of natural gas reserves, though it is suspected that the real figure may be closer to 700 Tcf.11 It is second only to Russia in the size of its natural gas reserves. The largest non-associated natural gas field is the South Pars, which is actually an extension of Qatar's North Field. South Pars holds an estimated 280 Tcf.12 Current Iranian natural gas production stands at 6.2 billion cubic feet per day (bcf/d), which appears to trail behind consumption at 6.6 bcf/d.13 The discrepancy does not mean that Iran imports natural gas; it is an anomaly likely due to massive reinjection of natural gas into wells for the purpose of boosting oil production.

Iran is working out plans for several liquid natural gas (LNG) operations, which would allow it to export natural gas. At present, none of these plans has made it off the drawing board. Though Iran does have abundant natural gas resources, it would be facing heavy competition from already established LNG exporters such as Australia and Indonesia.

The Caspian Sea

Iran is one of the nations bordering the Caspian Sea, with potential Caspian reserves of 15 billion barrels of oil and 11 Tcf of natural gas.14 Hardly any of these potential reserves have proven to be recoverable as of yet. Iran is the stumbling block in the division of the Caspian Sea among the various littoral states. It is the Iranian position that treaties between Iran and the former Soviet Union, signed in 1921 and 1940, remain valid. These treaties call for joint sharing of Caspian resources between Iran and the Soviet Union. Citing this treaty, Iran is insisting that the Caspian Sea should be held in common, or should be divided equally among all five bordering nations, giving each nation 20% of the Sea. Kazakhstan, Azerbaijan, and Russia, on the other hand, favor an equidistant division of the sea, which would leave Iran with only a 12 - 13% share. Iran refuses to consider that option, and has made several announcements that it will soon begin exploration in its 20% of the Caspian. On July 23, 2001, an Iranian gunboat intercepted two BP exploration vessels departed from Azerbaijan.15 Following this incident, exploration from neighboring states has either been suspended or proceeds very cautiously.

Iran stands to gain a great deal from the resolution of this dispute. Aside from direct ownership of potential reserves, Iran is in the most favorable geographical position of any of the littoral states for serving as a conduit of Caspian-and Central Asian-resources to other markets. Pipelines from the Caspian Sea to the Persian Gulf could provide the shortest route for oil and natural gas exports from this region. Another option would involve delivering crude from Caspian regions to refineries in northern Iran, while an equivalent amount of Iranian oil is exported from Persian Gulf terminals. Iran is planning to retool its infrastructure to accommodate such swaps. As part of this infrastructure, Iran has drawn up plans for a 240-mile pipeline from the Caspian port of Neka to northern refineries and also to Tehran, at a cost of $400 million.16 Sanctions supported by the US remain an impediment to all of these plans.

A Tough Situation

Iran is the most populous country in the Middle East, with a population of 68.3 million.17 Furthermore, the population is growing quickly and the majority of Iranians are young. These young people have few job prospects, and are heavily dependent on oil revenues. Oil exports account for 80% of Iran's total export earnings, 40-50% of the government budget, and 10-20% of the GDP.18 Most of the population lives in poverty. The country is saddled with a large foreign debt, much of it in the form of short-term debt. Most of the basic goods are subsidized by the state at a cost of billions per year. The government is burgeoning with inefficient and dogmatic bureaucracies and state monopolies. And the country suffers from international isolation and sanctions.

In this type of setting, it is no wonder that the country issues glowing production forecasts. They are in desperate need of foreign investment to keep their oil based economy afloat. To an unknown degree, these inflated discovery announcements and projections of future production must be designed to pacify the public, which is ripe for change. In saying that the public is ready for change, I do not want to suggest that the population will respond well to change forced upon them by foreigners, particularly Americans. The Iranian reaction to an invasion (read that regime change) would likely make the Iraqi quagmire seem like a picnic in comparison.

Less Oil than We Thought

The full importance of Iranian reserves lies in the belief that Iran is one of only five swing States-that is, countries with the capacity to increase oil production to make up for declining production elsewhere. The reserves of Iran, Iraq, and Saudi Arabia-along with Caspian and Central Asian reserves-are becoming increasing important in the face of revised reserve data and admissions from the industry that there is not as much oil left as we thought.

Sources say that Shell Oil's downgrading of fully 22% of its reserves19 was just the tip of the iceberg. Unnamed sources say that all of the majors have used similar tactics to inflate their image. Shell simply got caught at it. At some point in the future, all the other oil corporations will probably have to downgrade a portion of their reported reserves.

FTW has been in the lead reporting of doubts about Saudi Arabian reserve and spare capacity claims. Energy Investment banker Matthew Simmons has stated several times that his investigation of Saudi Arabia suggests that nation's oil production has already peaked. Aramco and government officials vehemently deny Mr. Simmons assertions, but have failed to produce any evidence to back up their own statements.20 Saudi Arabia's largest field is Ghawar, which produces 4.5 million barrels of oil per day, or 5.5% of world production.21 Ghawar is the worlds largest oil field and the basis for Saudi Arabia's oil supremacy. It accounts for 30% of Saudi oil reserves and up to 70$ of its daily output.22 For many years now, Aramco has been injecting sea water to hold up the pressure in the field and increase the production of oil. Currently, Aramco is injecting 7 million barrels of sea water into the field per day, and there are estimates that as much as 55% of the production from the field consists of water. The decline rate is a staggering 8%.23 And there is little good news to be found elsewhere in Saudi Arabia, as all of the major fields are aging and developing production problems. Ghawar, which has produced one out of every twelve barrels of oil pumped from the planet, has been in production since 1951.24 At the current rate of cut, production is collapsing and it will only be a matter of years before the field must be retired.

It has long been suspected that OPEC members had little spare capacity left. This suspicion was recently substantiated by Venezuela's oil minister, Rafael Ramirez, who told Reuters news service that OPEC had little spare capacity to help lower oil prices. "Most of the countries are near their production limits," Ramirez is quoted as saying.25 OPEC production is at its highest level since 1979, in the effort to meet the growing appetites of China and the US.26 This was confirmed by OPEC President, Purnomo Yusgiantoro, who has candidly stated that OPEC nations are powerless to cool the oil market. "There is no more supply," he said.27 Deutche Bank's global energy strategist, Adam Sieminski, has warned that oil prices have the potential to hit $100 per barrel.28

We have been stating for some time now that current Russian production will be paid for with a quick secondary peak and a much higher depletion rate. Russian production reached its first and largest peak in 1987.29 Over the past several years it has boosted production until Russia has become second in oil exports behind Saudi Arabia. Now it appears that Russia is waking up. In a story about coal, Professor Ian Fells of the British New and Renewable Energy Centre is quoted as saying, "The Russians told me they are going to build more nuclear plants, because they can't rely on oil and gas-and it's their oil and gas we are planning to rely on!"30 Russian Federal Energy Agency head, Sergei Oganesyan, recently said that Russia's oil production will probably stay flat or even drop in 2005.31 And oil prices surged after bailiffs ordered the Russian oil company Yukos to stop exporting oil. Yukos pumps 1.7 million barrels per day.32 It is doubtful that OPEC will be able to make up this shortfall, if it continues for long.

Colin Campbell, along with the Uppsala Hydrocarbon Depletion Study Group, recently updated their models to reflect the downgrading of reserves for the OPEC nations. We wish to direct your attention to several charts produced from their study. These charts can also be found at http://www.peakoil.net/uhdsg/Default.htm and in particular, the table of data summarizing regular oil production for the entire world, found at http://www.peakoil.net/ uhdsg/WORLD
_SUMMARY_html.htm. The table and the graphs provide an essential picture of our world energy situation. Their most recent model has moved the global oil peak forward, from 2010 to 2008. And it is beginning to appear that they may have been too generous in their reserve estimates for some of the nations included in the study.

Enter the Neocons

With global oil production racing towards its peak, the neocons surrounding G. W. Bush are probably very eager to consolidate the Middle Eastern oil reserves of Iraq, Iran and Saudi Arabia into their empire. And so we have Bush's claims that the 9-11 terrorists are linked to Iran, even as we are still trying to keep a lid on Iraq and Afghanistan.33 There is a desperate need to bring on new oil production in an effort to reduce oil prices before they impact the global economy. With a certainty, the Bush administration is eying an Iranian pipeline to bring Caspian oil to market. Yet the CIA has already backed away from administration claims of a 9-11 Iranian connection, in a tango reminiscent of the buildup to the Iraqi Invasion.34

On the surface, this targeting of Iran seems like madness. We simply do not have the spare forces to spread around. And there is evidence that some of the elite are turning against the Bush administration.35 They are worried that the neocon game plan endangers their own interests. The Bush administration needs to impress upon them how important their policy of oil imperialism is to the future of the US, and to the future of their business interests.

Many have wondered why the Bush administration has done little to lower oil prices. Could it be that they are using the higher oil prices, and possibly the newest revelations about Saudi, OPEC and Russian oil production to prod certain key players into the realization of just how desperate the global situation is? If key members of the elite wake up to the fact that we are facing the end of the oil age, with no likelihood of developing a viable alternative, would they continue to worry about a little bloodshed and the loss of some profits? Or would they sadly condone a bloodthirsty attempt to establish an oil empire in the Middle East and Central Asia? Sorry if this sounds cynical and paranoid, but that is how the game is played in the world of movers and shakers.

If this is the Bush behind-the-scenes strategy, then what is the Kerry behind-the-scenes strategy? Is he truly as clueless about the global energy situation as his public statements and his platform would suggest? Or has he assured the elite that he will beat the neocons at their own game, regardless of the cost to the US public, and to the people of other lands? Only time will answer these questions, if we are ever allowed to do more than guess at the answers.

One thing is certain: if the public in the US believes that it is up to them to decide who should be elected President, then they are completely deluded. Federal elections have never been honest. And now we are led by rigged polls and media manipulation to accept whoever the computer algorithms (and the Supreme Court, if need be) anoint as President. We need to wake up, people. There is a deadly game going on here, and we are being used as pawns.